>Auction Design

Auction Design

In March 2007, the New York Energy Research and Development Authority (NYSERDA), on behalf of RGGI States, engaged a research team led by the University of Virginia and Resources for the Future (RFF) to evaluate regional auction design options and make recommendations to the Staff Working Group and Agency Heads for the specifications of a regional RGGI allowance auction. The outcome of this research provided recommendations at a level of specificity that would allow participating states to jointly implement an auction platform and administer an auction, pursuant to design requirements and rules specified by RGGI States.

The research team used experiments (mock auctions in a laboratory setting) to test the performance of a number of auction formats considered good candidates for use in a carbon allowance market. The research team supplemented experimental results with additional analysis of academic literature and other experiences with allowance auctions.